The British Red Cross predicts that it will have cleared its £14 million deficit by the end of this year.
The charity embarked on a massive streamlining and modernisation strategy in 2000 in an attempt to overcome its financial difficulties. It now believes that the deficit will be cancelled out and it will be back into profit by December this year.
The streamlining process led to a number of redundancies and shop closures and alienated a section of the British Red Cross' membership, who objected to the centralisation of services.
"It's been a major and painful exercise, but it's clear that the process to make the charity more cost-effective has worked," said David Causer, director of finance at the British Red Cross. "We've made serious efforts across the entire organisation and have kept firm in our belief that we could transform our financial situation within time, although I don't think we believed we could do it so soon."